Council gives only limited support for bus fare increase

JAKARTA (JP): City Council Speaker Edy Waluyo rejected on Monday a possible bus fare increase following the central government's decision to raise fuel prices by 30 percent later this week.

Should bus operators insist on increasing fares, the increase should be limited to air-conditioned buses only, which generally target higher-income commuters.

As for regular buses, Edy said, the council would fight to maintain current bus fare levels as any increase would affect less privileged people.

He suggested that the city administration subsidize regular buses by using the city budget's reserve fund, which totals Rp 400 billion (US$36 million).

"The city council would not reject the subsidy if it were for poor people. We will allow the administration to decide on the technicalities of the subsidy," Edy said.

The fares for city buses currently range from Rp 500, for non air-conditioned and regular buses, to Rp 2,500 for air- conditioned buses.

Bus operators have claimed that the fuel price increase would raise operational costs for public buses and also raise the cost of spare parts. For these reasons, they have demanded that the city administration adjust bus fares in line with the fuel price increase.

Separately, City Governor Sutiyoso suggested that a bus fare increase was unavoidable because of the central government's decision to raise the price of fuel.

"Drivers and bus owners do not want to suffer losses due to the fuel price hike, do they?," Sutiyoso said on Monday.

Nevertheless, he insisted the fare increase should not exceed the change in fuel price.

He said the bus fare increase was necessary to keep bus operators in the city in business.

Jakarta currently has about 20,000 big, medium and small public buses. Only 35 percent of that number are operational, however, while the remaining 65 percent, mostly old buses, are immobile.

The city administration is currently planning a rejuvenation program for public buses. It plans to purchase some 2,000 buses from local manufacturer PT Texmaco, as well as importing buses from China and Korea.

The acquisition from Texmaco was previously suspended because no financial institutions were willing to fund the purchase.

Banks have rejected loans to bus operators, saying that the funds could not be repaid while they were charging such low fares.

Governor Sutiyoso said recently that the administration was seeking bank loans to finance the purchase of Texmaco buses, called Perkasa.

Edy Waluyo said on Monday that the city administration should decide quickly whether it would go ahead with its plan to buy buses from Texmaco.

"It should be decided quickly. If not, the decision could hang in the balance," Edy said.

Edy said that it would be better for the city administration to buy buses from a local company like Texmaco rather than importing them from overseas, in order to boost employment at local companies.

He suggested that city-owned Bank DKI take the initiative to arrange loans with other banks to finance the purchase of Perkasa buses.

"Bank DKI probably does not have the funds, but it could act as a broker. I don't know whether the bank has tried that before," Edy added. (jun)